Contract Worth $73 Million For Military Helos Dumped Due To Price, Ethical Questions

The Government of the Philippines has cancelled a deal to purchase military helicopters worth $73 million from PZL Swidnik amidst allegations that the bid committee rigged the process. While no actual evidence of collusion between the committee and PLZ Swidnik has been found, the government now says the price is too high.

The Philippine Air Force has been trying since 2007 to upgrade its fleet of attack helicopters which it says it needs to fight terrorists and Muslim separatist insurgencies. Inquirer.net reports that a Philippine defense department bid committee had received no bids for eight helicopters in a series of tenders in 2008 and 2009, and only received the bid from PLZ Swidnik after the parameters had been reduced from eight to seven aircraft with different engine and payload specs.

Philippine President Benigno Aquino halted the process and ordered the investigation in October. He said the rules had been "rigged" to favor the Polish defense contractor. That allegation was not proven during the course of the inquiry, but the panel did conclude that the altered tender was "disadvantageous to the government."

Defense ministry spokesman Eduardo Baltac said that Philippine Defense Secretary Voltaire Gazmin had approved the declaration of a failure of bidding. He has also frozen plans to acquire combat utility helos for the Philippine Navy. Gazmin said the country's efforts to modernize its military equipment was "going to encounter some delays."

FMI: www.dnd.gov.ph